Purchase Costs
Have you found a beautiful new home or are you still searching for the perfect property in Ibiza? In either case, it's important to know the costs associated with buying a house in Ibiza and how much they might be.
In general, you can expect the costs to be around 11% to 14% of the property value, depending on whether you need a mortgage. Below is a detailed explanation.
Transfer Tax or VAT?
In Spain, as in many other countries, the buyer is responsible for paying the transfer costs for real estate. Depending on the type of property (new construction, resale property, or a building plot), you will either pay VAT (IVA in Spanish) or transfer tax, known as ITP (Impuesto sobre Transmisiones Patrimoniales).
Resale Property
When purchasing an existing villa or apartment (where you are not the first resident), you pay transfer tax (ITP). This tax is calculated as follows based on the purchase price:
8% on the first €400,000
9% on the amount between €400,000 and €600,000
10% on the amount above €600,001
12% on the value between €1,000,001 and €2,000,000
13% on the value above €2,000,001
Example: For a purchase price of €850,000, you would pay:
€400,000 x 8% = €32,000
€200,000 x 9% = €18,000
€250,000 x 10% = €25,000
Total Transfer Tax = €75,000
New Construction
When purchasing a new house directly from a developer, you pay 10% VAT (IVA) instead of transfer tax. Additionally, the new and completed property must be registered, for which you pay an additional 1.5% tax.
Building Plot
When buying land, you pay 21% VAT instead of transfer tax. Note: You will also pay 21% VAT on any house built on this land.
Notary and Land Registry Fees
The transfer deed is signed at the notary and registered in the Land Registry of Ibiza (Registro de la Propiedad). These costs vary between 1.5% and 3% of the purchase price, depending on the price stated in the transfer deed.
Legal Fees
As mentioned in our buyer’s guide (click here), it is advisable to hire a lawyer or gestor to guide you through the purchase process and ensure that all legal matters are correctly handled. Lawyers in Ibiza typically charge up to 1% of the purchase price for their services.
Mortgage Costs
If you need a mortgage, the bank will handle the legal part of the purchase, so you don’t need a lawyer. However, the bank will charge fees for this service, which usually amount to up to 3% of the mortgage value.
Mortgages are subject to a tax of approximately 1% to 1.5%, and most banks charge arrangement fees (legal fees) of 1% to 1.5%. Banks also require a property appraisal report, which averages around €500. The mortgage must be registered by the notary’s office, and the notary charges an additional 1% for this service.
Buying from a Non-Resident
If you buy a house in Ibiza from a non-resident, you must deduct 3% of the purchase price and pay this amount within 30 days of the transaction to the Spanish tax office. This payment acts as a guarantee that the seller will pay capital gains tax and other taxes. If you pay this within 30 days, you don’t have to pay capital gains tax (CGT) unless the seller’s liabilities exceed the deducted 3%.
If you do not deduct and pay the 3%, you will have to pay the capital gains tax and may incur a fine. A resident must have a certificate showing they are a tax resident of Spain. Verify this with your lawyer and the notary.
Disclaimer
The information above is indicative; all costs are determined by the involved parties. For more information, please contact your real estate agent or legal advisor.
